Elderly, Childless Say Tax-Credit Plan Unfair

WHO COULD object to a tax credit for children? People without children, that's who. The childless, elderly and divorced are lining up to ask, "Where's ours?"

WASHINGTON - From almost any angle, the Republicans' proposed $500-per-child tax credit looks like a sure-fire crowd pleaser. But there's an undercurrent of discontent.

Although some lawmakers would rather cut the budget deficit or want lower-income eligibility caps, no one has doubted the credit's popularity.

However, resentment simmers among those left out. They include childless taxpayers, parents of children too old to qualify and divorced parents without custody.

"I do not have a chance to claim any exemptions, being single," Emerald Star of Hendersonville, Tenn., said in a letter to a GOP tax-reform commission. "I have been working since I was 15 to support myself and frankly am sick of `families' receiving aid."

Most taxpayers won't qualify

In fact, she represents the majority of taxpayers. Only 29 million households would get the credit, shifting some of the tax burden onto the other 86 million households.

The National Commission on Economic Growth and Tax Reform, headed by former Housing Secretary Jack Kemp, solicited letters in Money magazine and in other forums. Most focus on the long-range issue before the commission: whether a flat-rate income tax or a consumption tax should replace the current system. But many writers also commented on this year's legislation, which includes the credit.

Earlier this year, President Clinton proposed his own per-child credit. So some form of it seems to have the best chance of any tax provision to survive negotiations between the administration and Congress. But, whatever the outcome, not everyone will be happy.

"Do not limit the $500 tax credit to just families," wrote Wayne Wealer of Newport, Ore. "Retirees and all other middle-class taxpayers need tax relief as well. Taxation is putting us all in the poorhouse."

John Mallah, a Miami Beach attorney and president of the Association of Separated American Parents, said divorced parents without custody deserve the credit, as well as "Ozzie-and-Harriet" families.

"We want to provide for our children. . . . Unfortunately, we are often prevented from doing so because of our diminished living standard," he said.

Some, such as Joyce Ball of Danville, Ill., agreed with the Republican push to funnel tax relief to parents, above the current $2,450 exemption for dependents. "Who can raise a child on $2,450 a year?" she asked.

But others want stricter limits.

"A change . . . to allow a deduction for only one or two children would be an incentive to produce less children," wrote Fred Chapman of Virginia Beach, Va.

And Delores Smith, a biofeedback and stress-management therapist in Twin Falls, Idaho, said parents should pay higher taxes.

"Those with more children utilize more services and hence should be taxed more heavily, rather than given a tax break," she wrote.

Most young singles don't vote

GOP aides involved in drafting the Contract with America said legislators never considered the credit could have a political downside. And, despite the letter writers' complaints, analysts doubt it will.

"Most of the people who aren't getting the tax cut . . . are young single people. They're generally the most politically inactive group in the country," said J.D. Foster, executive director of the Tax Foundation, a business-financed research organization.

But tax lobbyist Clint Stretch of the Deloitte-Touche accounting firm said parents of children now in high school, who would lose the credit in a few years, may soon want it expanded.

One of the leading advocates of the tax credit, Rep. John Doolittle, R-Calif., said the people complaining about cutting taxes for families probably also are complaining about juvenile crime and drug abuse.

"If we don't reinvigorate the American family with a mom and dad in the home, then we're going to lose the battle," he said.

But that rationale doesn't carry weight with the disgruntled.

"I don't have a problem paying town taxes to educate the children, but I do have a problem paying my hard-earned money for people who don't want to work but just want to stay home and have babies," wrote Patricia Van Horne of Skowhegan, Maine.

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The proposals.

The Republican proposal is embroiled in budget talks between Congress and the White House. A $500 credit for each child younger than 18 would go to single parents earning as much as $75,000 a year and couples earning as much as $110,000. The final House-Senate compromise envisions a partial, $125-per-child tax cut for 1995.

The Clinton administration proposes a tax credit for families with children younger than 13. The plan would increase the benefit to $500 by 1999 and limit it for those earning more than $60,000 a year.